Slide 1: 2011 Fourth Quarter & Full Year Results
SPX Corporation 2011 Fourth Quarter & Full Year Results February 16, 2012 1 January 2012 1
Slide 2: Forward-looking statements
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations and financial projections, are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks, u
Slide 3: Introductory Comments
Introductory Comments INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 3
Slide 4: Recent Strategic Highlights
Recent Strategic Highlights Flow Vehicle Power Infrastructure Technology Service Solutions ClydeUnion acquisition Completed large power Announced divestiture transformer plant of Service Solutions Expanded food & expansion beverage business: Formed joint venture Integrated Gerstenberg, with Shanghai
Slide 5: 2011 Q4 and Full Year Key Financial Results
2011 Q4 and Full Year Key Financial Results ($ millions, except earnings per share data) year-over-year year-over-year Q4 2011 variance Full Year 2011 variance Revenue $1,492 +13% $5,462 +12% Organic Growth 11.2% 7.1% Segment Income $177 +10% $580 +4% Segment Income % 11.9% (20) pts 10.6% (90) pts A
Slide 6: Q4 Revenue by Region
Q4 Revenue by Region Q4 Year-Over-Year Change Q4 2011 Revenue Q4 2011 Q4 2011 Q4 2011 by Geography +10% +11% +20% North America 48% Europe 23% South Asia Pacific America Middle East 18% 2% & Africa 9% Q4 2011 +8% Double Digit Year-Over-Year Growth in Asia-Pacific, North America & Europe February 201
Slide 7: Backlog
Backlog ($ millions) Flow Technology 2011 ending backlog: $1.4b, +83% versus prior year: Year End Backlog by Segment 68% acquisition growth (primarily ClydeUnion) 16% organic growth (2%) currency impact $789 Thermal Equipment & Services $1,440 2011 ending backlog: $1.1b, (35%) versus prior year: (25
Slide 8: Financial Analysis
Financial Analysis INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 8
Slide 9: ClydeUnion Acquisition Impact
ClydeUnion Acquisition Impact ($ millions, except earnings per share data) Q4 2011 comments Revenue $13.6 Revenue recognized December 22nd thru 31st Operating Profit $0.3 Net of purchase accounting charges Interest expense on the debt Interest Expense $1.3 drawn to finance the acquisition $2.4 of tr
Slide 10: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 EPS from continuing operations $0.49 $0.62 $1.19 $1.25 $3.54 Tax benefits ($0.41) ($0.41) Strategic related actions $0.43 $0.27 $0.70 Asset impairments $0.29 $0.04 $0.33 Insurer Insolvency $0.22 $0.22 Adjusted EPS from continuing op
Slide 11: Q4 Adjusted Earnings Per Share
Q4 Adjusted Earnings Per Share Q4 Adjusted Earnings Per Share Year-Over-Year Bridge Q4 2010 adjusted EPS $1.13 $1.78 $1.13 Segment income Flow Technology $0.19 Test & Measurement $0.15 Thermal Equipment & Services ($0.12) Lower special charges $0.18 Reduced tax rate $0.14 Q4 2010 Q4 2011 Net other i
Slide 12: Consolidated Q4 Financial Analysis
Consolidated Q4 Financial Analysis ($ millions) Revenue 13% revenue growth: Segment Margins 11% organic growth $1,492 2% acquisition growth $1,325 (1%) currency impact Segment income margin: 12.1% 11.9% 120 points of dilution due: $14 million charge on Thermal’s South Africa projects $4 million of s
Slide 13: Flow Technology Q4 Analysis
Flow Technology Q4 Analysis ($ millions) Revenue 16% revenue growth: Segment Margins 13% organic growth $552 $565 4% acquisition growth: $14m of ClydeUnion revenue $486 14.6% 15.4% 15.1% 20% increase in segment income 15.1% segment income margin: 50 points of improvement year-over- year, even with 3
Slide 14: Flow Technology Full Year Analysis
Flow Technology Full Year Analysis ($ millions) Revenue Segment Margins $2,042 23% revenue growth: $1,634 $1,662 15% organic growth 4% acquisition growth 13.0% 13.1% 3% currency benefit 12.9% 25% increase in segment income 2009 2010 2011 13.1% segment income margin: 10 points of improvement Note: Se
Slide 15: Thermal Equipment & Services Q4 Analysis
Thermal Equipment & Services Q4 Analysis ($ millions) Revenue Segment Margins 8% revenue growth: $453 10% organic growth $419 (2%) currency impact 12.6% 17% decrease in segment income 9.7% 290 points of margin decline: $14 million charge on South Africa projects Q4 2010 Q4 2011 Note: See appendix fo
Slide 16: Thermal Equipment & Services Full Year Analysis
Thermal Equipment & Services Full Year Analysis ($ millions) Revenue Segment Margins 3% revenue growth: 0.4% organic growth $1,644 2.2% currency benefit $1,601 $1,602 27% decrease in segment income 12.1% 10.7% 8.6% 350 point decline in margin: Decline in higher margin power generation projects 90 po
Slide 17: Industrial Products & Services Q4 Analysis
Industrial Products & Services Q4 Analysis ($ millions) Revenue Segment Margins 18% organic revenue growth: >30% revenue growth in power $198 transformer business $168 Double-digit growth in sales of hydraulic technologies 8.9% 7.6% 130 points of margin decline: 220 points of margin dilution related
Slide 18: Industrial Products & Services Full Year Analysis
Industrial Products & Services Full Year Analysis ($ millions) Revenue Segment Margins 1% organic revenue growth $806 $699 $708 230 points of margin decline: 19.1% 150 points of margin dilution due 10.7% 8.4% to $11 million of costs associated with transformer plant expansion Lower year-over-year pr
Slide 19: Large Power Transformer Expansion
Large Power Transformer Expansion Completed Expansion of 140k Square Foot Expansion; Increases Capacity ~50% & Enables Increased Production of Large, High Voltage Power Transformers February 2012 19
Slide 20: Test & Measurement Q4 Analysis
Test & Measurement Q4 Analysis ($ millions) Revenue Segment Margins 9% revenue growth: $275 $252 5% organic growth 4% acquisition growth 11.9% 51% increase in segment income 8.6% 330 points of margin expansion Q4 2010 Q4 2011 Note: See appendix for non-GAAP reconciliations Revenue Growth and Margin
Slide 21: Test & Measurement Full Year Analysis
Test & Measurement Full Year Analysis ($ millions) Revenue Segment Margins 16% revenue growth: $1,068 9% organic growth $924 4% acquisition growth $810 10.4% 2% currency benefit 8.3% 6.3% 45% increase in segment income 210 points of margin expansion 2009 2010 2011 Note: See appendix for non-GAAP rec
Slide 22: Free Cash Flow and Capital Allocation
Free Cash Flow and Capital Allocation INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 22
Slide 23: Free Cash Flow
Free Cash Flow ($ millions) $100m voluntary pension funding in Q4 2010 $350 $265 $250 $219 $206 $150 173 $80 $50 $37 $33 $18 -$50 -$37 -$52 -$150 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 2010 2011* 2010 2011 2010 2011 2010 2011 2010 2011* *Excludes ClydeUnion acquisition Free Cash Flow impact; See appendix for non-G
Slide 24: Projected Liquidity
Projected Liquidity ($ millions) Estimated Cash on Hand at 12/31/2011 $551 Available Credit Lines $485 2012E Free Cash Flow (excluding Service Solutions)(1) ~$200 Regular Quarterly Dividend (2) ~($50) After-Tax Proceeds from Sale of Service Solutions ~$1,000 Estimated Debt Repayment ($350) Estimated
Slide 25: Leverage Ratios
Leverage Ratios Debt to EBITDA* Gross Leverage > 2.5x Gross Leverage Capital allocation focus: Net Leverage 3.5x Debt repayment Non-leveraging strategic 2.5x Gross Leverage acquisitions using cash on hand Target Range: 1.5x 1.5x to 2.5x Capital allocation focus: Strategic acquisitions 0.5x Share rep
Slide 26: Executive Summary
Executive Summary INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 26
Slide 27: Strategic Transformation
Strategic Transformation 2005-2011 2012 & Beyond 1997-2004 Global, Multi-Industry Supplier Global Supplier of Diversified Industrial Manufacturer of Engineered Solutions Flow Technology Solutions Diversification, >100 Acquisitions; Legacy divestitures ClydeUnion Acquisition APV Acquisition Service S
Slide 28: Strategic Transformation
Strategic Transformation 2012E Revenue Mix 2004 Revenue Mix (1) (from continuing operations) Thermal Equipment Vehicle & Services Service Infrastructure 24% 15% 28% Security $5.7b 14% FLOW FLOW 53% ~$5.2b 10% TECHNOLOGY TECHNOLOGY 9% 6% Compaction 7% 19% 8% 7% Niche Industrial Machinery Auto Other C
Slide 29: Key Growth Drivers
Key Growth Drivers Flow Technology: Building global Power & Energy platform: Oil & Gas market growth ClydeUnion integration; revenue & cost synergies Continued growth in Food & Beverage business Additional strategic acquisitions Power transformers: Large power transformer expansion Price recovery in
Slide 30: Executive Summary
Executive Summary 2011 financial highlights: 12% revenue growth 21% adjusted EPS growth Infrastructure & Niche Businesses Recent strategic highlights: Acquired ClydeUnion Signed definitive agreement to sell Service Solutions Completed power transformer plant expansion Formed joint venture with Shang
Slide 31: Questions?
Questions? INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 31
Slide 32: Appendix
Appendix INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 32
Slide 33: 2012 Segment Targets
2012 Segment Targets Thermal Equipment Industrial Products Flow Technology & Services & Services Revenue Revenue Revenue +33% to +38% (9%) to (14%) +7% to +12% Segment Income Margin Segment Income Margin Segment Income Margin 11.5% to 12.0% 8.2% to 8.7% 13.2% to 13.7% Note: ~100 points of margin dil
Slide 34: 2012 Modeling Framework
2012 Modeling Framework ($ millions) 2012 Pro Forma Modeling Framework (1) Revenue $5,050 to $5,300 Segment Income % 10.9% to 11.4% Tax Rate 28% Share Count 47m Cash on Hand ~$940 Projected Liquidity ~$1,472 Gross Debt (2) & ~$1,567 Leverage ~2.3x Net Debt (2) & ~$675 Leverage ~1.1x (1) Assumes the
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL February 2012 35
Slide 36: Adjusted EPS Model
Adjusted EPS Model ($ millions, except share data) 2010 2011 Revenue $4,887 $5,462 Segment income $560 $580 Corporate expense (96) (97) Pension / PRHC (52) (36) Stock-based compensation (31) (41) Impairment of goodwill and other intangibles (2) 0 Special charges (36) (25) Operating Income $343 $381
Slide 37: 2010 Adjusted Earnings Per Share
2010 Adjusted Earnings Per Share Q1 2010 Q2 2010 Q3 2010 Q4 2010 FY 2010 EPS from continuing operations $0.37 $1.40 $0.78 $1.30 $3.86 Tax benefits ($0.40) ($0.17) ($0.57) Refinancing charges $0.33 $0.33 Adjusted EPS from continuing operations $0.37 $1.00 $1.11 $1.13 $3.62 February 2012 37
Slide 38: 2011 Adjusted Earnings Per Share
2011 Adjusted Earnings Per Share Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 EPS from continuing operations $0.49 $0.62 $1.19 $1.25 $3.54 Tax benefits ($0.41) ($0.41) Strategic related actions $0.43 $0.27 $0.70 Asset impairments $0.29 $0.04 $0.33 Insurer Insolvency $0.22 $0.22 Adjusted EPS from continui
Slide 39: Q4 2011 Organic Revenue Growth Reconciliation
Q4 2011 Organic Revenue Growth Reconciliation Quarter Ended December 31, 2011 Net Revenue Acquisitions/ Change Divestitures Currency Organic Flow Technology 16.3% 3.9% -0.4% 12.8% Thermal Equipment & Services 8.2% 0.0% -2.2% 10.4% Test & Measurement 9.2% 4.2% 0.0% 5.0% Industrial Products & Services
Slide 40: Full Year 2011 Organic Revenue Growth Reconciliation
Full Year 2011 Organic Revenue Growth Reconciliation Year Ended December 31, 2011 Net Revenue Acquisitions/ Change Divestitures Currency Organic Flow Technology 22.8% 4.3% 3.4% 15.1% Thermal Equipment & Services 2.6% 0.0% 2.2% 0.4% Test & Measurement 15.6% 4.1% 2.4% 9.1% Industrial Products & Servic
Slide 41: 2010 Free Cash Flow
2010 Free Cash Flow ($ millions) Full Year Q1 2010 Q2 2010 Q3 2010 Q4 2010 2010 Net cash from continuing operations $ (25) $ 49 $ 20 $ 213 $ 257 Capital expenditures (12) (12) (12) (40) (76) Payments on early termination of swap agreements - - 25 - 25 Adjusted free cash flow from continuing operatio
Slide 42: 2011 Free Cash Flow
2011 Free Cash Flow ($ millions) Full Year Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Net cash from continuing operations $ (35) $ 48 $ 111 $ 202 $ 326 Capital expenditures (16) (31) (31) (76) (154) Free cash flow from continuing operations $ (52) $ 18 $ 80 $ 126 $ 172 Impact from ClydeUnion acquisition $
Slide 43: 2012E Free Cash Flow
2012E Free Cash Flow ($ millions) Full Year 2012E Net cash from continuing operations $ 320 Capital expenditures (120) Free cash flow from continuing operations $ 200 February 2012 43
Slide 44: Debt Reconciliations
Debt Reconciliations ($ millions) 12/31/2011 Short-term debt $ 74 Current maturities of long-term debt 1 Long-term debt 1,926 Gross Debt $ 2,001 Less: Puchase card program and extended A/P programs $ (40) Adjusted Gross Debt $ 1,961 Less: Cash in excess of $50 $ (501) Adjusted Net Debt $ 1,460 Note:
Slide 45: Bank EBITDA Reconciliations
Bank EBITDA Reconciliations ($ millions) 2010 2011 Revenues $4,887 $5,462 Net Income $206 $181 Income tax provision (benefit) 53 34 Interest expense 87 97 Income before interest and taxes $346 $312 Depreciation and intangible amortization expense 113 121 EBITDA from continuing operations $459 $433 A